To answer the main part of your question is because eating, sleeping, using the restroom, and all the rest of what happens naturally will make the game have a slower pace than normal, harder to produce, and would be frustrating towards the player to constantly sleep and so on. If there were eating, sleeping, going potty, etc., then the pace of the game would be slow and probably much less fun.
To answer the sub-question(s), people do eat Pokemon, which is obviously evident in both the anime and in the game series. This is mainly because a good hub of Pokemon are based off of animals. Since in reality, humans are omnivorous, or willing to eat animals and plants, it would be odd for all humans to be vegetarians to those who not watching/playing Pokemon.
To finish up, there are Pokemon, in the anime, that look and act like animals. Some cases those Pokemon are treated as such animal. I have noticed 3 types of Pokemon intelligence and are labeled as: wild, domestic, and human-like.
Wild intelligent Pokemon are, in fact, dumb animals. These Pokemon are obviously are wild and are treated as such and are most likely the Pokemon we see being consumed. A good example are the Magikarp that appear in display fish tanks in those market or festival scenes.
Domestic intelligent Pokemon are at the same level as pets and those found on farms and ranches, preferably horses and herding dogs. These Pokemon are less likely to be food, but if the Pokemon isn't considered to be the equivalent to the working animal or an animal that yields a non-edible resource, like wool, then they probably will end up on your plate.
Human-like intelligent Pokemon are just like the name implies, they have a conscience (to a certain level). These Pokemon essentially are the Pokemon that all trainers in the anime have. The prime examples of human-like intelligent are Meowth from Team Rocket and Ash's Pikachu.
I hope you enjoyed my small wall of an answer and found this helpful.
